Kepler exits stealth with $470 million to fix the AI memory bottleneck
What's the deal? Kepler ComputingDealroom has a profile for this one. Try Dealroom →, a San Jose-based chip startup, has raised $468 million in late-stage venture funding to build a new architecture for high-bandwidth memory (HBM) that it says can help ease the global memory-chip shortage. The round drew GlobalFoundriesDealroom has a profile for this one. Try Dealroom →, Intel Capital, AMD VenturesDealroom has a profile for this one. Try Dealroom →, Baillie Gifford, and Bill Gates's Gates FrontierDealroom has a profile for this one. Try Dealroom → fund.
Why now? The memory shortage has sent prices surging and left AI data centres scrambling for HBM, the memory of choice for modern chips. New fabs are hugely expensive and slow to build, and demand runs in cycles.
What's the endgame? Founded in 2018, Kepler claims its "3D stacking" approach and a proprietary material can boost chip density without extreme ultraviolet lithography (EUV) — the costly step most chipmakers rely on. It says the method works in existing fabrication plants and can match the density of 2-nanometer or 3-nanometer chips.
The company is applying the same idea to SRAM, the high-speed cache memory used in CPUs, GPUs, and XPUs, and to HBM, which uses stacks of DRAM. Much of its testing runs in Singapore, where investor and manufacturing partner GlobalFoundries — which put in $50 million — has a facility. Kepler also runs tests in GlobalFoundries' Vermont plant.
What changed the plan: "For a long time our thinking was that we'd work on SRAM first and then follow up with DRAM and HBM," says Debo Olaosebikan, cofounder and chief executive officer. "But with the launch of ChatGPT [in 2022] and the explosion of demand for an HBM alternative, we started working on our HBM road map. Now we're making SRAM and HBM in parallel."
In July, the US Department of Commerce committed up to $245 million to help Kepler develop AI memory technology in the US.
What could go wrong? Kepler still has to prove it can produce its technology at scale. Established players such as SK HynixDealroom has a profile for this one. Try Dealroom → and MicronDealroom has a profile for this one. Try Dealroom → are pouring billions into new HBM fabs, betting demand will hold.
The signal: The $468 million round sits in the 99th percentile of late-stage venture deals in its country, all-time — a sign of how much capital is chasing a way around the semiconductor industry's biggest bottlenecks. "We didn't go in thinking that this would be a replacement for DRAM or a replacement for SRAM," says Srini Ananth, managing director at Intel Capital. "We figured the market would dictate that, and now you're seeing a demand for both."
Read more: WIRED
Image credit: Kepler Computing
